Free Case Evaluation

 
 
X Close
Phone Call Us 414-326-9231
608-260-7133
Toll Free 866-678-9352
Text Us 414-277-7742
You can also feel free to text us at 414-277-7742 to set up your FREE appointment with our attorneys today

Protecting against accusations of fraudulent conveyance in bankruptcy

In a previous post, we mentioned that fraudulent transfer may be found in cases where a debtor voluntarily or involuntarily transferred assets or incurred debts with actual intent to hinder, delay or defraud any entity to which the individual was indebted. We also noted that fraudulent transfer may be found in cases where the debtor received less than reasonably equivalent compensation for the transfers or debts. Here we wanted to say a bit more on this topic.           

It is important to be clear about the difference between the above two grounds for a finding of fraudulent transfer since the requirements for making an initial case for fraudulent transfer are different. Usually, it is very difficult to provide solid proof of intent to defraud. Typically, non-circumstantial evidence is required. 

In looking for evidence of fraudulent intent in a bankruptcy case, a variety of red flags exist. These include things like:

  • Transferring assets to or incurring debts with an insider;
  • Retaining possession or control of property after the alleged transfer;
  • Concealing the asset transfer or incurred debt;
  • Prior threat of litigation against the debtor; or
  • Substantial debt was taken on shortly before or after the transfer.

These and other "badges of fraud" need to be dealt with carefully by debtors, since they do not serve as proof of intent to defraud, but only possible signs of fraudulent intent. Legitimate defenses and explanations may exist for certain transactions and debts aside from fraud.

Whether the basis for taking action against a debtor, the plaintiff must prove intent to defraud by clear and convincing evidence, a higher standard than the ordinary preponderance standard. Debtors can and should benefit from working with an experienced attorney to defend themselves against unfounded accusations of fraudulent transfer and to know when a bankruptcy filing may put them at risk for such accusations.

No Comments

Leave a comment
Comment Information

Contact Our Milwaukee Law Firm

Reach Miller & Miller Law, LLC, online or call us at 414-326-9231 to schedule a free initial consultation. Our law office also provides Spanish language services. Se habla español.

To schedule an initial consultation, call 414-326-9231 or contact Miller & Miller today.

Free Case Evaluation

* indicates required field

 
 

Milwaukee Office
633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Law Office Map

Kenosha Office
6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Law Office Map

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Law Office Map

Madison Office
2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Law Office Map